Cognizant Technology Solutions Corp

Accenture (NYSE:ACN) stock rose about 8% on Thursday following its results for the third quarter of fiscal 2020. The company posted better-than-expected results.

On March 18, Accenture (NYSE:ACN) stock fell 4.2% and closed at $151.15. Based on the last closing price, the company has a market cap of $99.3 billion.

Infosys (INFY) shares have fallen 14% today. The pullback means that the company has risen 3.8% year-to-date. The stock has traded flat in the last 12 months.

Accenture has made a strong comeback this year after losing over 10.0% of its market value in 2018.

Shares of software services company Cognizant Technology (CTSH) have fallen close to 22.0% in the last 12 months.

Cognizant (CTSH) fell 11% on May 3 to close trading at $59.25.

Cognizant (CTSH) stock fell 7.7% on May 2 to close trading at $66.61.

Accenture’s revenue increased 7.0% YoY to $10.6 billion in the first quarter of fiscal 2019.

IBM’s (IBM) Global Business Services segment comprises its Consulting, Global Process Services, and Application Management sub-segments.

Accenture (ACN) has risen 3.8% in the last month, whereas in the last year, the stock’s price has soared 32.7%.

Cognizant Technology Solutions reported its 1Q18 results on May 7, and its stock fell more than 5.2% on the day.

Cognizant Technology Solutions (CTSH) stock has returned 35% in the last 12 months, 2% in the last month, and was flat in the last five days.

Cognizant Technology Solutions (CTSH) expects revenue to come in between $3.88 billion and $3.92 billion in 1Q18.

Cognizant aims to build a strong position in the digital industrial economy.

Analysts expect Cognizant’s EBITDA to rise 5.2% in fiscal 2018, 15% in fiscal 2019, and 11% in fiscal 2020.

On March 22, 2018, VMware’s last trading price was $122.10. The stock was trading 2.0% below its 20-day moving average of $125.00.

US-based (SPY) Cognizant Solutions (CTSH) stock has generated returns of 29% in the trailing-12-month period, 10% in the trailing-one-month period, and 0.5% in the trailing-five-day period.

To lead the global digital transformation effort, Cognizant (CTSH) is providing solutions to transform businesses’ operating and technology models.

Shares of information technology company Cognizant (CTSH) have risen over 5% since it announced its 3Q17 results in November 2017.

Cognizant (CTSH) plans to announce its 4Q17 results on February 7, 2018. Analysts expect Cognizant to post revenue of $3.8 billion.

On January 26, 2018, International Business Machines (IBM) with a market cap of approximately $155 billion continued to be the largest player by market capitalization in the IT consulting space.

International Business Machines (IBM), a leading enterprise solutions provider, has seen its revenue decline consistently for the past 22 quarters.

In the previous part of this series, we saw that NetApp’s (NTAP) revenue in fiscal 2Q18 rose YoY (year-over-year), driven by a robust product portfolio and strong demand for storage solutions.

IBM was trading at a forward EV-to-EBITDA multiple of ~9.25x on November 11, 2017.

Analysts expect Cognizant’s (CTSH) revenues to rise 9.7% YoY to $14.8 billion in fiscal 2017, compared with its revenues of $13.5 billion in fiscal 2016.

Before Vivant Digital, IBM made several acquisitions in 2016 to boost its iX business. IBM acquired Ecx.io, Aperto, Resource/Ammirati, Bluewolf Group, and Expert Personal Shopper.

In May 2017, Cognizant Technology Solutions (CTSH) announced a new partnership with Pivotal, which may accelerate the adoption of cloud applications.

In the trailing 12-month period, Cognizant Technology Solutions (CTSH) stock has risen 24.4%. In the last month, it has risen 4.8%.

On August 3, 2017, Cognizant Technology Solutions (CTSH) will announce its 2Q17 results. Analysts expect Cognizant to post revenue of $3.66 billion.

Of the 28 analysts covering Accenture, 16 gave it a “buy” recommendation, one recommended a “sell,” and 11 recommended a “hold.”

In June 2017, Accenture (ACN) announced the acquisition of SolutionsIQ for an undisclosed amount. SolutionsIQ provides agile transformation solutions for enterprises.

On April 20, 2017, VMware’s stock had risen ~77.5% in the trailing-12-month period. In the trailing-one-month period, it had risen ~3.4%.

Activist hedge funds’ stake in Salesforce Earlier in this series, we discussed factors that will work in Salesforce’s (CRM) favor in 2017. It is seeking to double its revenue to $20 billion by 2021–2022. According to Bloomberg, hedge fund and activist investors, namely Corvex Management, Jana Partners, and Sachem Head Capital, had taken a stake in […]

Cognizant’s annual revenues of $13 billion, with its annual cash flow of $1 billion and balance sheet of $4 billion, should help with shareholder returns.

On November 30, IBM was the largest player by market capitalization in this space, followed by Accenture. Cognizant (CTSH), Infosys, Wipro, and Teradata.

Elliott management’s high stake and recent stimulus to Cognizant’s (CTSH) stock is part of a plan to push the stock to $80–$90 per share by the end of 2017.

Agreeing straight away to Elliott Management’s “suggestion,” Cognizant (CTSH) announced the acquisition of Mirabeau on November 29, 2016.

Elliott Management’s ownership in Cognizant drove the recent 10% rise in the latter’s stock. But the stock has actually fallen 7% on a YTD basis.

On November 28, 2016, Cognizant stock saw a double-digit surge. Here’s what happened.

In fiscal 2015, Cognizant’s (CTSH) Financial Services segment accounted for 40.3% of total revenue, followed by 29.5% for the Healthcare business and 18.9% for Manufacturing.

In early October 2016, Everest Group named Cognizant (CTSH) as a “Leader” and “Star Performer” in the Digital Services business segment.

Accenture (ACN) generated investor returns of 22.9% in the trailing-12-month period and 5.6% in the trailing-one-month period.

Accenture’s (ACN) revenue rose 8% YoY (year-over-year) in fiscal 4Q16, which represents the firm’s tenth consecutive quarter of strong revenue growth.

On September 29, Accenture reported fiscal 4Q16 revenue of $8.5 billion. Revenue rose 8% YoY in fiscal 4Q16 and 9% YoY on a constant currency basis.

Cognizant’s (CTSH) second strategic initiative is to improve productivity and effectiveness in core transaction processes of enterprises.

According to technology (QQQ) firm Cognizant (CTSH), digital transformation is a key driver for demand and creates new areas of growth through innovation and differentiation.

Although Cognizant is quickly becoming a major player through a series of acquisitions in the digital transformation space, it faces competition from technology (QQQ) heavyweights like Microsoft.

MAPTX’s was managing assets worth $6.7 billion in May 2016, making it the largest fund under review in terms of asset size.

GSAGX aims to invest 80% of its net assets in “a diversified portfolio of equity investments in Asian issuers (excluding Japanese issuers).”

The Fidelity Pacific Basin Fund invests 80% of its assets in stocks and bonds issued by companies located in the Pacific Basin.

Of the 15 analysts covering Computer Science Corporation’s (CSC) stock, four have given it a “buy” recommendation and 11 have given it a “hold” recommendation.

CSC’s fiscal 4Q16 revenues fell by 5.4% YoY to $1.8 billion. On a constant currency basis, revenues fell by 2.4% YoY in fiscal 4Q16.

Akamai is developing new services for its customers, as its competitors are now capable of providing content delivery network services at similar prices.

Revenues from the financial services segment of the India-based (EPI) (INDA) Infosys (INFY) were $2.6 billion in fiscal 2016.

From a purely net asset value return standpoint, the Fidelity Pacific Basin Fund (FPBFX) was among the top three funds in its peer group in the one-year period ending March 31, 2016, as well as in 1Q16.

MAPTX has been in existence since September 1994 and has an expense ratio of 1.1%. A minimum of $2,500 is required to invest in this fund.

GSAGX is invested in the stocks of companies such as Alibaba Group, Cognizant Technology Solutions, Ctrip.com, and Advanced Semiconductor Engineering.

GSAGX hasn’t provided sector-level breakdowns. China was its biggest invested geography, making up 37.9% of the fund’s assets.

MAPTX is invested in the stocks of companies such as Baidu, Lenovo Group, Yum! Brands, Cognizant Technology Solutions, and HDFC Bank.

Apple (AAPL) is set to open its first technology development facility in India’s (EPI) IT (information technology) corridor of Hyderabad.

In terms of NAV (net asset value), the Fidelity Pacific Basin Fund (FPBFX) was the best-performing fund among the nine we’ll be looking at in this series.

The Fidelity Pacific Basin Fund (FPBFX) aims to invest 80% of its net assets in the common stocks of “Pacific Basin issuers and other investments.”

Cognizant believes this acquisition will strengthen and expand its digital capabilities as firms are now moving critical business applications to cloud-based IT infrastructures.

Cognizant’s (CTSH) revenues in 2015 rose by an impressive 21% to $12.4 billion from $10.3 billion in 2014.

On February 8, 2016, Cognizant (CTSH) reported 4Q15 revenues of $3.2 billion, an increase of 17.9% YoY and 1.4% quarter-over-quarter.

India’s (INDA) tech giant Wipro (WIT) generated investor returns of -7.5% in the trailing-12-month period and -7.7% in the trailing-one-month period.

Revenues from the financial services segment of the India-based (EPI) Infosys (INFY) were $663 million in fiscal 3Q16. This is 27.5% of total revenues.

India’s leading IT services company, Infosys, generated investor returns of -3% in the trailing-12-month period and 0.12% in the trailing-one-month period.

Societe Generale raised its rating of Infosys from “sell” to “hold” in September. Susquehanna gave the firm a rating of “neutral.”

CSC still has to wait to move on the Xchanging deal, as the takeover panel granted Ebix (EBIX), one of the bidders, more time to finalize its offer on December 10, 2015.

As of December 8, 2015, IBM had generated returns of -15.3% in the TTM period and 2.0% in the trailing one-month period.

Of the 27 analysts covering IBM (IBM), six have a “buy” recommendation, nine have a “sell” recommendation, and 15 have a “hold” recommendation.

Cognizant’s strong revenue growth, stable financial position with reasonable debt, and growth in EPS caused its stock price to rise in 2015.

Cognizant’s Healthcare segment grew more than 43.3% to $939.2 million in 3Q15 due to TriZetto. It expanded the company’s offerings in the healthcare space.

The SPDR Russell 2000 Low Volatility ETF (SMLV) invests 1.4% of its holdings in Syntel.

Infosys Limited-ADR (INFY) has a market cap of $38.4 billion. Infosys’ YTD (year-to-date) price movement was a mix of ups and downs in 2015.

Science Applications International (SAIC) declared a quarterly dividend of $0.31 per share and approved the repurchase of up to 3.5 million shares.

Accenture’s interest coverage ratio looks comfortable, due to low debt levels and to the fact that its operating margin has been expanding steadily.

In the past 12 months, Accenture’s revenue growth per share has increased by 7.8%, while Cognizant’s has increased by 17.6%.

Accenture reported 3Q15 revenues of ~$8.28 billion, compared to $8.24 billion in 3Q14. Its gross profits for 3Q15 were $2.52 billion, a 0.43% YoY decline.

Accenture is one of the world’s largest multinational technology services, management consulting, and outsourcing companies and is headquartered in Dublin.

In February 2015, Cognizant Technology Solutions announced its 4Q14 results and reported revenues of $2.74 billion, up 16.4% from $2.36 billion in 4Q13.

Founded in October 1993 by Lee S. Ainslie III and Sam Wyly with assets of $38 million, Maverick Capital is currently worth more than $6 billion.

CSC delivered cost savings of $115 million in 3Q15 and $310 million YTD. CSC expects to deliver cost takeout benefits of $450 million–$500 million in 2015.

JANA Partners declared its increased stake in CSC, believing that the company is undervalued. JANA wants CSC to look for strategic alternatives.

Eminence Capital sold its position in Ralph Lauren (RL) during 3Q14. The stock accounted for 1.35% of the fund’s 2Q14 portfolio. Net revenues for 2Q15 increased 4% to $2 billion.

Eminence Capital increased its position in TIBCO Software (TIBX) during 3Q14. The stock accounts for 3.08% of the total portfolio—up from 1.76% of the fund’s 2Q14 portfolio.

Eminence Capital started a position in Zimmer Holdings (ZMH) during 3Q14. The position accounts for 1.09% of the fund’s 3Q14 portfolio.

Eminence Capital started a position in Cognizant Technology Solutions (CTSH) during 3Q14. The position accounts for 1.13% of the fund’s 3Q14 portfolio.

Eminence Capital started a position in McDonald’s (MCD) during 3Q14. The position accounts for 1.49% of the fund’s 3Q14 portfolio.

Eminence Capital initiated a position in Apple (AAPL) during 3Q14. The position accounts for 1.58% of the fund’s 3Q14 portfolio. AAPL is based in Cupertino, California.

Eminence Capital initiated a position in GNC Holdings during 3Q14. The position accounts for 2.40% of the fund’s 3Q14 portfolio. GNC is headquartered in Pittsburgh, Pennsylvania.

During the third quarter, Farallon Capital Management initiated a position in Cognizant Technology Solutions (CTSH). The position accounted for 2.06% of the fund’s 3Q14 portfolio.

Farallon Capital Management started a new position in Tim Hortons Inc. (THI) during the third quarter of 2014. The position accounted for 2.62% of the fund’s 3Q14 portfolio.

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The Global Financing segment, or GFS, is the financing division of IBM Corp. (IBM). It assists potential clients by providing financing facilities.

Paul Tudor Jones II in 1982 founded Tudor Investment Corporation, which is today a leading asset management firm headquartered in Greenwich, Connecticut. The Tudor Group, consisting of Tudor Investment Corporation and its affiliates, is involved in active trading, investing and research in assets across fixed income, currencies, equities and commodities asset classes and related derivative […]

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